Exhibit 5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
effective as of February 25, 1999, by and among Xxxxxx X. Xxxxx (the "Investor")
and United Payors & United Providers, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Upon the terms and subject to the conditions of a Purchase Agreement,
dated as of February 2, 1999 (the "Purchase Agreement"), by and among the
Investor and the Independent Divestment Trust (the "Trust"), the Investor has
agreed to purchase from the Trust shares of the common stock, $0.01 par value
("Common Stock"), of the Company ("Purchase Agreement").
B. Such Purchase Agreement used by the Investor is a prerequisite to the
Company's acquisition of a financial institution;
C. The Company considers this Agreement to be in the best interests of the
Company and its stockholders.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements of the parties contained herein, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. Definitions. As used herein, the terms below shall have the following
meanings. Any such term, unless the context otherwise requires, may be used in
the singular or plural, depending upon the reference.
"Affiliate" shall have the meaning provided in the Exchange Act.
"Agreement" shall mean this Registration Rights Agreement.
"Closing Date" shall have the meaning provided in the Securities
Purchase Agreement dated as of February 2, 1999 by and between Capital Z
Financial Services Fund II, L.P. and the Investor.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Stock" shall have the meaning provided in Recital A.
"Common Stock Equivalents" means, without duplication with any other
Common Stock or Common Stock Equivalents, any warrants, options, convertible
securities or indebtedness, exchangeable securities or indebtedness, or other
rights exercisable for or convertible or exchangeable into, directly or
indirectly, Common Stock, whether at the time of issuance or upon the passage of
time or the occurrence of some future event.
"Company" shall mean United Payors & United Providers, Inc., a
Delaware corporation, and any successor thereto.
"Demand Registration" shall mean a registration effected pursuant to
Section 2(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor law, and the rules and regulations issued pursuant to
that Act or any successor law.
"Holder" shall mean any holder of Shares listed on the signature
pages hereof and any direct or indirect transferee of any such holder that
becomes a party hereto by executing and delivering a Registration Rights
Agreement Joinder in the form attached hereto as Exhibit A.
"Initiating Holders" shall have the meaning provided in Section
2(b).
"Investor" shall have the meaning provided in the preamble of this
Agreement.
'Person" shall mean an individual, partnership, limited liability
company, joint venture, corporation, trust or unincorporated organization or any
other similar entity.
"Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document by the
Commission.
"Registrable Shares" shall mean (a) the Shares beneficially owned by
any Holder and (b) any shares of Common Stock or other securities of the Company
issued or distributed to a Holder with respect to, in exchange for or in
replacement of, any of the Shares; provided, however, that such shares of Common
Stock and other securities shall be treated as Registrable Shares only if and so
long as (i) they have not been sold by the Investor pursuant to an effective
Registration Statement under the Securities Act, (ii) they have not been sold to
the public in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof or pursuant to
Rule 144 under the Securities Act or any similar provision), or (iii) they may
not immediately be resold by a Holder pursuant to Rule 144 (k) under the
Securities Act without any volume limitation.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any successor law, and the rules and regulations issued pursuant to that Act
or any successor law.
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"Purchase Agreement" shall have the meaning provided in Recital A.
"Shares" shall mean 2,250,000 outstanding shares of Common Stock.
"Violation" shall have the meaning provided in Section 7(a).
2. Demand Registration.
(a) General. If the Company shall receive, at any time after
365 days after the Closing Date (subject to Section 10 of this Agreement),
a written request from Holders that the Company file a registration
statement under the Securities Act covering the registration of at least
750,000 Registrable Shares (adjusted for all stock splits or similar
transactions), then the Company shall, within ten (10) days of the receipt
thereof, give written notice of such request to all Holders and shall,
subject to the limitations of this Section 2 file a registration statement
with respect to that number of Registrable Shares specified in such
written request (and such Registrable Shares as may be specified in the
written notice of any other Holder delivered to the Company within twenty
(20) days after the date on which the Company mailed notice of the
initiating written request to such other Holder) within 90 days of its
receipt of such written request (the "Required Filing Date") and use all
commercially reasonable efforts to cause such registration statement to be
declared effective by the Commission as promptly thereafter as is
practicable.
(b) Underwriters Cut-back. If the Holders initiating the
registration request under Section 2(a) (the "Initiating Holders") intend
to distribute the Registrable Shares covered by their request by means of
an underwritten offering, they shall so advise the Company as a part of
their request made pursuant to Section 2(a), and the Company shall include
in the applicable registration statement such information with respect
thereto as may be required or advisable. The selection of the managing
underwriter of any underwritten offering under this Section 2 shall be
made by a majority in interest of the Initiating Holders, with the consent
of the Company (such consent not to be unreasonably withheld) . In the
case of an underwritten offering, the right of any Holder to include
Registrable Shares in the related registration shall be conditioned upon
the inclusion of such Holder's Registrable Shares in the underwritten
offering (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder). All Holders proposing to
distribute their securities through such underwritten offering shall
(together with the Company as provided in Section 4(e)) enter into an
underwriting agreement with customary terms with the underwriter or
underwriters selected for such underwritten offering. Notwithstanding any
other provision of this Agreement, if the managing underwriter advises the
Initiating Holders that marketing factors require or make advisable a
limitation of the number of shares to be included in the underwritten
offering, then the Initiating Holders shall so advise all other
participating Holders, and the number of Registrable Shares that may be
included in the underwritten offering shall be allocated among all
participating Holders, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Shares owned by each
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Holder; provided, however, that the number of Registrable Shares to be
included in such underwritten offering shall not be reduced unless and
until all other securities shall have been excluded from the underwritten
offering.
(c) Limit on Demand Registrations. The Company is obligated to
effect only two (2) Demand Registrations pursuant to Section 2 for an
aggregate of up to 2,250,000 shares of Common Stock (as adjusted for all
stock splits or similar transactions). For purposes of this Section 2(c),
no such registration shall be deemed a Demand Registration unless and
until the registration statement filed pursuant thereto has been declared
effective by the Commission.
(d) Deferral of Filing. The Company may defer the filing (but not
the preparation) of any registration statement required by Section 2 for a
period of up to: (i) 45 days in the event that the Company or any of its
Subsidiaries is engaged in confidential negotiations or other confidential
business activities, disclosure of which would be required in such
registration statement (but would not be required if such registration
statement were not filed), and the Board of Directors of the Company
determines in good faith that such disclosure would be materially
detrimental to the Company and its stockholders or would have a material
adverse effect on any such confidential negotiations or other confidential
business activities, or (ii) 120 days in the event that the Board of
Directors of the Company determined to effect a registered underwritten
public offering of the Company's securities for the Company's account and
the Company takes substantial steps (including, but not limited to,
selecting a managing underwriter for such offering) and proceeds with
reasonable diligence to effect such offering; provided that if such
determination is made by the Board of Directors after receipt of a Demand
Registration request, the Board prior to such request shall have commenced
negotiations with an underwriter with respect to such offering; and
provided further, however, that during any period of 360 consecutive days,
Holders shall not be subject to deferrals pursuant to the Company's
exercise of deferral rights for a period of at least 180 consecutive days
(which deferral period shall coincide with the deferral period permitted
under Section 2(d) of that certain Registration Rights Agreement, dated
the date hereof, between the Company and CapZ Fund). A deferral of the
filing of a registration statement pursuant to this Section 2(d) shall be
lifted, and the requested registration statement shall be filed forthwith,
if, in the case of a deferral pursuant to clause (i) of the preceding
sentence, the negotiations or other activities are terminated or the
transaction contemplated by such negotiations or other activities are
consummated, or, in the case of a deferral pursuant to clause (ii) of the
preceding sentence, the proposed registration for the Company's account is
abandoned. In order to defer the filing of a registration statement
pursuant to this Section 2(d), the Company shall promptly (but in any
event within 10 days), upon determining to seek such deferral, deliver to
each Initiating Holder a certificate signed by an executive officer of the
Company stating that the Company is deferring such filing pursuant to this
Section 2(d) and a general statement of the reason for such deferral and
an approximation of the anticipated delay. Within 20 days after receiving
such certificate, the holders of a majority
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in interest of the Registrable Shares held by the Requesting Holders and
for which registration was previously requested may withdraw their request
by giving notice to the Company. If withdrawn, the such request shall be
deemed not to have been made for all purposes of this Agreement.
(e) Expenses of Demand Registration. All expenses of Demand
Registrations shall be paid by the selling Holders; provided, however,
that if any securities other than the Shares are included in a Demand
Registration, any person on whose behalf such securities have been
included shall pay that percentage of the total expenses which equals the
percentage of the total proceeds received by such person, and the selling
Holders shall have no responsibility for any such expenses.
3. Piggy-Back Registration.
(a) General. If at any time after 180 days after the Closing Date,
the Company proposes to register (including for this purpose a
registration effected by the Company pursuant to Section 2 of this
Agreement) any shares of its Common Stock under the Securities Act in
connection with the public offering of such securities (other than a
registration on Form S-4 or Form S-8 (or any successor forms)), the
Company shall, at such time, promptly give each Holder written notice of
such registration. Upon the written request of each Holder given within
fifteen (15) days after mailing of such notice by the Company in
accordance with Section 18 hereof, the Company shall cause to be
registered under the Securities Act all of the Registrable Shares that
each such Holder has requested to be registered, subject to the
underwriter cutback and other provisions of Section 3(b) hereof.
(b) Underwriting Requirements. In connection with any underwritten
offering, the Company shall not be required under this Section 3 to
include any Holder's Registrable Shares in such underwritten offering
unless such Holder shall have agreed in writing to the terms of the
underwriting as agreed upon among the Company and the underwriters
selected by the Companyor by selling stockholders, as the case may be, and
then only in such quantity as the underwriters determine in their sole
discretion will not materially and adversely affect the distribution of
securities to be covered by such registration statement such determination
to be confirmed in writing upon the request of any Holder. If the total
amount of Registrable Shares requested by Holders to be included in such
offering pursuant to Section 3(a) exceeds the amount of securities that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in
the offering only that number of Registrable Shares and shares of Common
Stock offered by other selling shareholders which the underwriters
determine in their sole discretion will not have a material adverse effect
on the offering (the securities so included to be apportioned among all
selling Holders and other selling shareholders pro rata according to the
total amount of shares of Common Stock proposed to the be sold by each
selling holder.
(c) Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing,
qualification or sale of
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Registrable Shares pursuant to this Section 3, including (without
limitation) all registration, filing, and qualification fees, and
printers' fees, accounting fees and the fees and disbursements of counsel
for the Company relating or apportionable thereto, but excluding
underwriting discounts and commissions, stock transfer taxes and the fees
and expenses of separate counsel, if any, retained by the selling Holders.
4. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Shares, the
Company shall, as expeditiously as reasonably possible, use reasonable
commercial efforts to do the following:
(a) Commission Filing. Prepare and file with the
Commission a registration statement with respect to such Registrable
Shares and to cause such registration statement to become effective,
and, upon the request of the Holders of a majority of the
Registrable Shares registered thereunder, keep such registration
statement effective for up to 180 days or until all of the Shares
registered thereunder are sold, whichever occurs sooner.
(b) Amendments. Prepare and file with the Commission
such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by
such registration statement, and furnish such copies thereof to the
Holders and any underwriters as they may reasonably request.
(c) Prospectus. Furnish to the Holders and any
underwriters such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Shares
owned by them, and cause all related filings to be made with the
Commission as required by Rule 424 under the Securities Act.
(d) Blue Sky Qualification. Register and qualify the
Registrable Shares covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders and any underwriters; provided,
however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) Underwriting Agreement. In the event of any
underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering, including, without
limitation, delivering opinions of counsel and "comfort letters" of
accountants. Each Holder participating in such underwriting shall
also enter
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into and perform its obligations under such an agreement.
(f) Prospectus Delivery. Promptly notify each Holder of
Registrable Shares covered by the registration statement at any time
when the Company becomes aware of the happening of any event as a
result of which the registration statement or the prospectus
included in such registration statement or any supplement to the
prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein (in the case of the prospectus, in light of
the circumstances under which they were made) not misleading or, if
for any other reason it shall be necessary during such time period
to amend or supplement the registration statement or the prospectus
in order to comply with the Securities Act, whereupon, in either
case, each Holder shall immediately cease to use such registration
statement or prospectus for any purpose and, as promptly as
practicable thereafter, the Company shall prepare and file with the
Commission, and furnish without charge to the appropriate Holders
and managing underwriters, if any, a supplement or amendment to such
registration statement or prospectus which will correct such
statement or omission or effect such compliance and provide such
copies thereof as the Holders and any underwriters may reasonably
request.
(g) Make generally available to the Company's
securityholders an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than 30 days after the
end of the 12-month period beginning with the first day of the
Company's first fiscal quarter commencing after the effective date
of a registration statement, which earnings statement shall cover
said 12-month period, and which requirement will be deemed to be
satisfied if the Company timely files complete and accurate
information on Forms 10-Q, 10-K and 8-K under the Exchange Act and
otherwise complies with Rule 158 under the Securities Act;
(h) If requested by the managing underwriter or any
seller, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing
underwriter or any seller reasonably requests to be included
therein, including, without limitation, with respect to the
Registrable Shares being sold by such seller, the purchase price
being paid therefor by the underwriters and with respect to any
other terms of the underwritten offering of the Registrable Shares
to be sold in such offering, and promptly make all required filings
of such prospectus supplement or post-effective amendment;
(i) As promptly as practicable after filing with the
Commission of any document which is incorporated by reference into a
registration statement, deliver a copy of each such document (in the
form in which it was incorporated) to each seller;
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(j) Cooperate with the sellers and the managing
underwriter to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless
required under applicable law) representing securities sold under
any registration statement, to enable such securities to be in such
denominations and registered in such names as the managing
underwriter or such sellers may request and to make available to the
Company's transfer agent prior to the effectiveness of such
registration statement a satisfactory supply of such certificates;
(k) Promptly make available for inspection by any
seller, any underwriter participating in any disposition pursuant to
any registration statement, and any attorney, accountant or other
agent or representative retained by any such seller or underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to
enable them to fulfill their due diligence responsibilities, and
cause the Company's officers, directors and employees to supply all
information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the registration statement or the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, the Company shall not
be required to provide any information under this subparagraph (x)
if (A) the Company's Board of Directors determines in good faith,
after consultation with counsel for the Company, that to do so would
cause the Company to forfeit an attorney-client privilege that was
applicable to such information or (B) if either (1) the Company has
requested and been granted from the SEC confidential treatment of
such information contained in any filing with the SEC or documents
provided supplementally or otherwise or (2) the Company reasonably
determines in good faith that such Records are confidential and so
notifies the Inspectors in writing unless prior to furnishing any
such information with respect to (A) and (B) such Holder of
Registrable Shares requesting such information agrees to enter into
a confidentiality agreement in customary form and subject to
customary exceptions; and provided further, however, that each
Holder of Registrable Shares agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at
its expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(l) Furnish to each seller and underwriter a signed
counterpart of (A) an opinion or opinions of counsel to the Company
and (B) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering
such matters as are customarily covered by such opinions or comfort
letters, as the case may be, as the sellers or managing underwriter
reasonably requests;
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(m) Cause the Registrable Shares included in any
registration statement to be (A) listed on each securities exchange,
if any, on which similar securities issued by the Company are then
listed, or (B) authorized to be quoted and/or listed (to the extent
applicable) on the National Association of Securities Dealers, Inc.
Automated Quotation System or the National Market System of Nasdaq
Stock Market if the Registrable Shares so qualify;
(n) Provide a CUSIP number for the Registrable Shares
included in any registration statement not later than the effective
date of such registration statement;
(o) Cooperate with each seller and each underwriter
participating in the disposition of such Registrable Shares and
their respective counsel in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.;
(p) During the period when a prospectus is required to
be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act;
(q) Notify each seller of Registrable Shares promptly of
any request by the Commission for the amending or supplementing of
such registration statement or prospectus or for additional
information;
(r) Prepare and file with the Commission promptly any
amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Company or the
managing underwriter, is required in connection with the
distribution of the Registrable Shares;
(s) Enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) as are
customary in connection with an underwritten offering;
(t) Advise each seller of such Registrable Shares,
promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order issued by the Commission
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if
such stop order should be issued;
(u) Cooperate in a reasonable manner, considering among
other
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things operating responsibilities to the Company, with each seller
and each underwriter participating in the disposition of Registrable
Shares in connection with their selling efforts, including, without
limitation, by making its officers and employees reasonably
available for road show or other presentations; and
(v) Subsequent to the date hereof, not grant rights to
more than four (4) Demand Registrations to any Person in connection
with any transaction or series of related transactions, or
Piggy-Back Registration rights having a priority over the Piggy-Back
Registration rights granted under this Agreement.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement
with respect to the Registrable Shares of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Shares held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such
Holder's Registrable Shares.
6. Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification. In the event (i) any Registrable Shares are
included in a registration statement under this Agreement or (ii) any
other shares of Common Stock held by the Investor are included in any
registration statement:
(a) Indemnification by the Company. To the fullest extent
permitted by law, the Company will indemnify and hold harmless each
Holder, each of its directors, officers, partners, employees,
advisors, agents and representatives, and each person, if any, who
controls such Holder within the meaning of the Securities Act or the
Exchange Act and any agent or investment advisor thereof, against
any and all losses, claims, damages, expenses (including, without
limitation, attorneys' fees and disbursements) and liabilities
(joint or several) to which they may become subject, insofar as such
losses, claims, damages, expenses (including, without limitation,
attorneys' fees and disbursements) and liabilities (or actions in
respect thereof) arise out of, relate to, result from or are based
upon any of the following (each a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus
or final prospectus contained therein, or any amendments or
supplements thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act,
the Exchange Act, or any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act,
or any state securities law, and the Company will
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pay to each such Holder or other person, as incurred, any legal or
other expenses reasonably incurred by one law firm retained by them,
plus appropriate local counsel in connection with investigating or
defending any such loss, claim, damage, expense, liability, or
action; provided, however, that the indemnity agreement contained in
this Section 7(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, expense, liability, or action if such
settlement is effected without the consent of the Company, nor shall
the Company be liable in any such case for any such loss, claim,
damage, expense, liability, or action to which any Holder or other
indemnifiable person may become subject to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for
use in connection with such registration by such Holder or other
indemnifiable person. This right to indemnification shall remain in
full force and effect notwithstanding any investigation made by or
on behalf of such Holder or other indemnifiable person and shall
survive the transfer of such securities by such Holder.
(b) Indemnification by Selling Holder. To the fullest extent
permitted by law, each selling Holder severally, but not jointly,
will indemnify and hold harmless the Company, each of its directors,
each of its officers, partners, employees, advisors, agents and
representatives, who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, and any agent or investment
advisor thereof, any other Holder selling securities registered in
such registration statement and any controlling person of any such
underwriter or other Holder against any and all losses, claims,
damages, expenses (including, without limitation, attorney's fees
and disbursements) and liabilities (joint or several) to which any
of the foregoing persons may become subject, insofar as such losses,
claims, damages, expenses (including, without limitation, attorney's
fees and disbursements) and liabilities (or actions in respect
thereto) arise out of, relate to, result from or are based upon any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in
connection with such registration; provided, however, that the
indemnity agreement contained in this Section 7(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably
withheld); provided, further, that in no event shall any indemnity
under this Section 7 (b) exceed the net proceeds from the offering
received by such Holder.
(c) Procedures. Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying
party under this Section 7, deliver to the indemnifying party a
written notice of the commencement thereof in accordance with
Section 18 hereof and the indemnifying party shall have the right to
participate in, and, to the extent the
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indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which
may be represented without conflict by one counsel) shall have the
right to retain one separate counsel (plus appropriate local
counsel), with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement
of any such action, if prejudicial in any material respect to its
ability to defend such action, shall to the extent prejudicial
relieve such indemnifying party of any liability to the indemnified
party under this Section 7, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than
under this Section 7.
(d) Contribution. If the indemnification provided for in this
Section 7 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified parties on the other in connection with the actions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or related to
information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action;
provided, however, that in no event shall the liability of any
selling Holder hereunder be greater in amount than the difference
between the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Shares giving rise to such
contribution obligation and all amounts previously contributed by
such Holder with respect to such losses, claims, damages,
liabilities and expenses. The amount paid or payable to a party as a
result of the losses, claims damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately
- 12 -
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) Survival. The obligations of the Company and Holders under
this Section 7 shall survive the completion of any offering of
Registrable Shares in a registration statement under this Agreement,
and otherwise.
8. Reports Under Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the Commission that may at any
time permit a Holder to sell securities of the Company to the public
without registration, the Company agrees to use commercially reasonable
efforts to:
(a) make and keep public information available, as those terms
are defined in Rule 144;
(b) file with the Commission in a timely manner all reports
and other documents required to be filed by the Company under the
Securities Act and the Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Shares, promptly upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual and/or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation
of the Commission which permits the selling of any Registrable Shares
without registration.
9. "Market Stand-Off" Agreement. Each Holder hereby agrees
that for a period of 180 days, or such shorter period required by the
underwriters, following the effective date of any registration effected
pursuant to Section 2, or if Holders participate in the sale of securities
effected pursuant to Section 3 hereof, such Holder, if requested by the
managing underwriter, shall not, directly or indirectly sell, offer to
sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase or otherwise transfer or dispose of (other
than to donees and Affiliates who agree to be similarly bound) any
securities of the Company held by it at any time during such period,
except shares of Common Stock included in such registration. In addition,
each Holder agrees, if applicable, to acknowledge the undertaking provided
for in this Section 9 by entering into customary written "lock-up"
agreements with the managers of the relevant underwriting. The
requirements of this Section 9 shall not apply to any Holder that
(together with its Affiliates), at the time of receipt of the referenced
notice from the Company, (i) beneficially owns less than 5% of the
outstanding shares of Common Stock, (ii) is not an Affiliate or an
employee of the Company and (iii) waives any further benefits of this
Agreement for it or any subsequent assignee or transferee of its
Registrable Shares.
In order to enforce the foregoing covenant, the Company may impose
stop
- 13 -
transfer instructions with respect to the Registrable Shares of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
10. "Lock-up" Agreements. Each Holder agrees to enter into a
customary written "lock-up" agreement with respect to the Registrable
Shares with the managers of any underwritten public offering by the
Company of shares of its equity securities for cash, which offering is
completed on or before August 31, 1999; provided, however, that the
aggregate of such "lock-up" period together with any deferral period
pursuant to Section 2(d) shall not exceed the deferral period permitted
under Section 2(d).
11. Right of First Offer.
(a) Notice of Proposed Transaction; Election. In the event
that any Holder or any holder of Common Stock Equivalents or shares of
common stock received upon exercise of such Common Stock Equivalents who
is a direct or indirect transferee of the Investor (the "Selling Holder")
desires to effect a sale, within the meaning of Section 2(3) of the
Securities Act of 1933, as amended, of any or all of its shares of Common
Stock or any Common Stock Equivalents (collectively, the "Subject
Shares"), the Selling Holder shall first give written notice (a "Right of
First Offer Notice") of such desire to the Company setting forth the terms
and conditions of sale and the price at which the Selling Holder desires
to sell. The Company shall thereupon, within twenty (20) business days
following its receipt of the Right of First Offer Notice (the "Right of
First Offer Election Period"), notify the Selling Holder in writing of the
number, if any, of Subject Shares that the Company or its designee, as the
case may be, desires to subscribe to purchase (the "Right of First Offer
Subscription"). Failure to respond to the Selling Holder with regard to
the Right of First Offer Notice prior to the expiration of the Right of
First Offer Election Period shall be deemed to be an election not to
subscribe for any of the Subject Shares. If the Selling Holder satisfies
all of the foregoing conditions and the Company and its designees, as the
case may be, do not collectively subscribe for all of the Subject Shares,
then the Selling Holder may, upon the expiration of the Right of First
Offer Election Period, sell the Subject Shares not subscribed for by the
Company or its designees, as the case may be, to any other person at a
purchase price equal to or higher than the price set forth in the Right of
First Offer Notice; provided, however, that the Selling Holder shall again
become subject to the above restrictions on transfer if a definitive
agreement for the proposed transfer is not entered into within ninety (90)
days after the expiration of Right of First Offer Election Period. This
Section 11(a) shall
- 14 -
not apply to any Transfer by any Holder to any Affiliate of such Holder.
Procedure for Sale. If all the Subject Shares are
subscribed for by the Company or its designees, as the case may be, the
closing of the purchase of the Subject Shares shall take place at the
principal offices of the Company no later than thirty (30) days after the
date of the expiration of the Right of First Offer Election Period
(subject to the last sentence of this Section 11(b)). At the closing, the
Company or its designees, as the case may be, will pay the purchase price
for the Subject Shares to be purchased by it to the Selling Holder by wire
transfer of immediately available funds upon the Selling Holder's delivery
of valid certificates evidencing the Subject Shares. Such certificates
will be duly endorsed (with signatures guaranteed, if appropriate) for
transfer to the Company or its designees, as the case may be, and upon
delivery of such certificates to the Company or its designees, as the case
may be, the Selling Holder will be deemed to represent and warrant to the
Company or its designees, as the case may be, that the Subject Shares are
owned by the Selling Holder free and clear of all liens, adverse claims
and other encumbrances (other than as provided in this Registration Rights
Agreement), and that the Selling Holder has all requisite power and
authority to sell the Subject Shares. The parties shall take all such
actions as may be necessary to comply as promptly as practicable with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, in
connection with the sale of the Subject Shares.
12. Amendment. This Agreement may be amended and the
observance of any provision of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and Holders of
at least sixty-six percent (66%) of the Registrable Shares. Any amendment
or waiver effected in accordance with this Section 12 shall be binding
upon each Holder, each transferee thereof and the Company.
13. Termination. The rights provided in this Agreement shall
terminate on the tenth anniversary of the effective date of this
Agreement.
14. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED,
INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF).
15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
- 15 -
16. Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.
17. Negotiation of Agreement. Each of the parties acknowledges
that it has been represented by independent counsel of its choice
throughout all negotiations that have preceded the execution of this
Agreement and that it has executed the same with consent and upon the
advice of said independent counsel. Each party and its counsel cooperated
in the drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto shall be
deemed the work product of the parties and may not be construed against
any party by reason of its preparation. Accordingly, any rule of law or
any legal decision that would require interpretation of any ambiguities in
this Agreement against the party that drafted it is of no application and
is hereby expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intentions of the parties
and this Agreement.
18. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto
shall be in writing, shall be deemed to have been duly given or delivered
when delivered personally or telecopied (receipt confirmed, with a copy
sent by reputable overnight courier), or one business day after delivery
to a reputable overnight courier, postage prepaid, to the address of the
party set forth below such party's signature on this Agreement or to such
address as the party to whom notice is to be given may provide in a
written notice to each of the other parties to this Agreement, a copy of
which written notice shall be on file with the Secretary of the Company.
19. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms to the fullest extent permitted by law.
20. Further Assurances. Each of the parties shall, without
further consideration, execute and deliver such additional documents and
take such other action as the other parties, or any of them, may
reasonably request to carry out the intent of this Agreement and the
transactions contemplated hereby.
21. Successors and Assigns. This Agreement shall be binding
upon, and all rights hereto shall inure to the benefit of, the parties
hereto, and their respective successors and assigns that execute and
deliver a Registration Rights Agreement Joinder in the form attached
hereto as Exhibit A.
22. Entire Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the
actions and transactions contemplated by this Agreement. There are no
restrictions promises, inducements, representations, warranties, covenants
or undertakings with regard to the registration of the Shares pursuant to
the Securities Act, other than those expressly set forth or referred to in
this Agreement.
- 16 -
23. Recapitalization, etc. The provisions of this Agreement
(including any calculation of share ownership) shall apply, to the full
extent set forth herein with respect to the Registrable Shares, to any and
all shares of capital stock of the Company or any capital stock,
partnership units or, any other security evidencing ownership interests in
any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) that may be issued in respect of, in exchange
for, or in substitution of the Registrable Shares by reason of any stock
dividend, split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
- 17 -
UNITED PAYORS & UNITED PROVIDERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Operating Officer
Address:
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
Address:
- 18 -
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT JOINDER
The undersigned, a [individual, corporation, partnership, etc. and place
of residence or organization , joins in the execution of that certain
Registration Rights Agreement ("Agreement"), dated _______________, by and among
_____________, a _______________, and United Payors & United Providers, Inc., a
Delaware corporation, for the purpose of accepting the benefits conferred and
assuming the obligations and liabilities imposed upon Holders (as such term is
defined in the Agreement) pursuant to the terms of the Agreement, with respect
to ___________ of the Shares (as such term is defined in the Agreement).
------------------- ------------------------------------
Date
- 19 -
REGISTRATION RIGHTS AGREEMENT JOINDER
-------------------------------------
The undersigned, a Bermuda exempt and limited partnership, joins in
the execution of that certain Registration Rights Agreement (the "Agreement"),
dated February 25, 1999, by and between Xxxxxx X. Xxxxx and United Payors &
United Providers, Inc., a Delaware corporation, for the purpose of accepting the
benefits conferred, and assuming the obligations and liabilities imposed, upon
Holders (as such term is defined in the Agreement) pursuant to the Agreement,
with respect to 2,240,334 of the Shares (as such term is defined in the
Agreement).
February 25, 1999 CAPITAL Z FINANCIAL SERVICES
FUND II, L.P.
By: Capital Z Partners, L.P.,
its General Partner
By: Capital Z Partners, Ltd.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman of the Board
NYFS08...:\60\33560\0019\2205\FRM2219U.020
REGISTRATION RIGHTS AGREEMENT JOINDER
-------------------------------------
The undersigned, a Bermuda exempt and limited partnership, joins in
the execution of that certain Registration Rights Agreement (the "Agreement"),
dated February 25, 1999, by and between Capital Z Financial Services Fund II,
L.P., a Bermuda exempt and limited partnership, as assignee of Xxxxxx X. Xxxxx,
and United Payors & United Providers, Inc., a Delaware corporation, for the
purpose of accepting the benefits conferred, and assuming the obligations and
liabilities imposed, upon Holders (as such term is defined in the Agreement)
pursuant to the Agreement, with respect to 9,666 of the Shares (as such term is
defined in the Agreement).
February 25, 1999 CAPITAL Z FINANCIAL SERVICES
PRIVATE FUND II, L.P.
By: Capital Z Partners, L.P.,
its General Partner
By: Capital Z Partners, Ltd.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
NYFS08...:\60\33560\0019\2205\FRM2219P.210
